Volvo Car India’s Strategic Outlook for FY26
Volvo Car India is optimistic about the upcoming fiscal year 2026 despite the challenging dynamics faced by the global automobile market. In an exclusive interview, Jyoti Malhotra, Managing Director of Volvo Car India, shared insights on the current landscape and future plans amid geopolitical uncertainties, tariffs, and fluctuating market conditions.
Product Launches and Electric Vehicle Commitment
In the first quarter of the year, Volvo unveiled the XC90, a flagship internal combustion engine (ICE) sport utility vehicle, featuring a mild hybrid system. Additionally, the company is set to introduce the EX30, a compact electric SUV, to the Indian market later this year. Malhotra remarked, “We aim to bring one electric car every year,” underscoring the company’s commitment to electric mobility in India.
Despite the current penetration of electric vehicles (EVs) in India standing at approximately 2%, projections indicate growth to about 5% by FY27 and 9% by FY30, as noted in a report from Nomura. Enhanced public awareness and government incentives are significant drivers of this anticipated growth.
Market Analysis and Future Projections
In April 2025, Volvo Car India recorded the sale of 35 EVs, slightly down from 40 units in April 2024. For the coming year, the focus will heavily lean towards expanding the electric vehicle segment. Malhotra indicated that although ICE vehicles will remain part of the product lineup, the luxury electric car sector is beginning to show significant presence, accounting for 6-7% of total electric vehicle sales in India.
Tax Structures and Policy Challenges
The tax landscape remains a barrier to the rollout of plug-in hybrid electric vehicles (PHEVs) in India. With a Goods and Services Tax (GST) of 28% and an effective rate hovering around 48% due to additional taxes, Malhotra emphasized that under current conditions, introducing PHEVs does not make sense for the Indian market. “The government is nudging the industry towards electrification, and we welcome the move,” he added.
Incentives for EV Adoption
Various states in India are implementing policies to foster EV adoption, such as road tax exemptions and reduced registration fees. Delhi’s Draft EV Policy 2.0, for example, suggests waiving road taxes for hybrids, while full waivers are proposed for battery electric vehicles (BEVs) priced below INR 20 lakh. Malhotra expressed the need for uniform support across states to enhance the viability of EVs.
Charging Infrastructure Initiatives
As the charging infrastructure develops, Malhotra emphasized the necessity for improvements in home charger installations, which require careful planning regarding electrical systems. He remarked on the importance of utility companies facilitating easy access for home charger setups.
A significant innovation in charging solutions is the proposal for a unified app system that would streamline the charging experience for EV owners. Current fragmentation in payment systems across different stations presents challenges, making a centralized solution essential for widespread EV adoption.
Local Production and Market Expansion
Volvo has been assembling vehicles in India since 2017, achieving a production milestone of 10,000 units at its facility in Bengaluru earlier this year. Malhotra confirmed that all future offerings will be assembled locally, with the aim to accelerate production timelines. Currently, the focus remains squarely on the Indian market, leveraging the diverse regional demands to bolster sales.
Global Sales Trends
Internationally, Volvo Cars witnessed an uptick in electrified vehicle sales in 2024, with fully electric models selling 175,194 units, marking a 54% increase from 2023. Conversely, data from the Federation of Automobile Dealers Associations (FADA) indicates a decline in India’s electric car sales, with figures dropping to 442 units in 2024 from 570 in 2023—a decrease of 22%.
As Volvo Car India navigates these transformations, it remains steadfast in its objective to pioneer the electric mobility revolution while consolidating its market presence in a rapidly evolving automotive landscape.